Again, I don't think you understand crypto very well. I can buy coins on a DEX and transfer them to my hard wallet. There's no 'Verifying' or 'Knowing my address'.
Again, your government banning selling goods for crypto makes it a better investment opportunity for the world.
I'm not sure what you mean about "understanding" crypto, the concepts here are dead simple, there's not much to misunderstand.
In this scenario it doesn't matter that you can transfer some coins from a DEX to your "hard wallet". If you haven't registered your hard wallet's address with the government and linked it to your identity, you will be unable to use those coins for anything other than trading with other unverified wallets.
If you want to exchange the coins in your hard wallet for any valuable or material good whatsoever, without disclosing your actual identity to the government, you'd have to find someone willing to do so illegally i.e. a black market.
And the receiver of your "dirty" bitcoin, which is verifiably dirty because the transaction came from your (unverified) wallet, would then have to solve the same problem of laundering the BTC if he wanted to use it to pay for his costs / employees / etc.
And if we're talking about a large economic power, I'm not sure how banning crypto and making its transactions more difficult would help anyone; if anything it would negatively impact that crypto since it is less usable as a medium of exchange.
It may seem outlandish that a government would even go to these lengths, but I'd argue that wielding a centralized currency is too powerful for governments to give it up without a fight.
Again, your government banning selling goods for crypto makes it a better investment opportunity for the world.